BT Group in SA for the long term, says exec
- Published on 05 October 2012
Weeks of violent mine and transport worker strikes, and a resulting downgrade from credit ratings agency Moody’s have tarnished South Africa’s image this year. But multinational telecommunications provider BT Group is sticking to SA as a key player in its sub-Saharan Africa operations, despite the country’s woes.
This is according to Olivier Campenon - the BT president for Europe, the Middle East and Africa (EMEA) - in an exclusive interview with ITWeb Africa.
BT Group has committed itself to a plan to double its market share in the Middle East and Africa (MEA). And the firm said earlier this year that it views South Africa as a strategic country to help it achieve this goal, as it plans to employee 100 of its 170 staff for the region in SA.
Campenon has told ITWeb Africa that it has already hired 30% of this proposed total workforce number.
The company is also set to move into new offices in Johannesburg in 2013 as part of this expansion, while it is also working with FibreCo to build its own fibre-optic network between Cape Town and Johannesburg.
But global concerns about SA’s stability have rocked the country after weeks of violent strikes.
A wildcat strike at Marikana’s Lonmin platinum mine, in the country’s North West province last month, resulted in the death of 36 workers. Lonmin eventually caved in to demands to hike striking workers salaries by 22%, while a commission of enquiry has started this week to investigate what led to the tragedy.
Subsequently, though, other mine and even transport worker strikes have kicked off in SA, resulting in Moody’s downgrading the country’s credit rating from A3 to Baa1. This means it will cost the country more to borrow from international lenders owing to higher risk.
All of this also comes about at a time when other African nations such as Kenya are experiencing strong economic growth, with a forecast increase in Gross Domestic Product (GDP) of about 5% this year as compared to SA’s sluggish 2.6%, according to the International Monetary Fund (IMF).
Multinational ICT firms, such as IBM and Qualcomm, have also invested heavily in Kenya this year, because the country is increasingly becoming viewed as a potential technology hub for Africa.
However, Campenon says BT Group is committed to viewing SA as its hub for the African region.
"I'm still looking at South Africa as our main hub, because I still believe the advance, the investment that this country has done has put them in the higher league," Campenon told ITWeb Africa.
“It's a long term commitment to South Africa because we do see this country as playing a key role in the development of business both in the country and for the rest of Africa," he added.
Campenon, though, told ITWeb Africa that the strikes in SA are a “wake-up call” for the country. He further said competition from other African countries is good for SA, as it could push the nation to achieve more.
Sadiq Malik, senior consultant MEA at Informa Telecoms & Media, agrees that despite question marks over SA’s stability, the country is still at its prime to attract ICT investment.
“The penetration of broadband internet in SA is still below 10% of the population, which means there is great scope for growth in all business sectors that rely on broadband connectivity,” Malik told ITWeb Africa.
“The ICT industry does not rely on manual labour so union pressure is low,” he added.
Malik further said that instead of SA maintaining its overall dominant position as an ICT hub in Africa, it could become one important area among three tech centres on the continent.
“The African market is polarising into three hubs : Kenya for East Central Africa , Nigeria for West Africa and South Africa retains its south hub pre dominance.
“In time SA will have less weight as a Pan-African hub simply because the Kenya and Nigeria have become powerful ICT hubs.
“The submarine landing sites in each country and favourable government regulation and frameworks have changed the equation to make them more investor friendly,” he concluded.